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“The most important investment lesson in the world” according to Warren Buffett

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The ten year performance bet between Warren Buffett and hedge fund manager Protégé Partners is a topic we have written about in the past and we thought we would offer an update.  The eight year period between 2008 and 2015 saw the S&P 500 index outperforming the hedge fund manager by over 43%!  If Buffett is right that investing in a low cost index fund will outperform the hedge fund over a ten year period, one million dollars will be donated to Buffett’s charity of choice.  But, there are two years remaining on the bet!  Warren Buffett goes on to say that “No consultant in the world is going to tell you just buy an S&P index fund and sit for the next 50 years,” he said. “You don’t get to be a consultant that way and you certainly don’t get an annual fee that way.”  That statement may be true for those on Wall Street, but, not true for fee-only firms like Addis & Hill.  We have been proponents of indexing since our founding over sixteen years ago!  And, we know how we deliver value to our clients in countless ways beyond delivering an investment return.  Our clients are happy if we can hover around what the markets deliver and provide comprehensive financial and life planning services.  It’s a simple model, but, takes a lot of work and we are more confident than ever that it’s the right way to do things.

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